Virtual Worlds — Real Estate where Virtual Communities Gather

Virtual worlds are relatively new phenomenon that offers exciting new capabilities for building virtual communities. They are real-time, multimedia social meeting places—graphical spaces where people embodied as "Avatars" gather, interact in public and private spaces, own and share objects and spend lots of time online. Our data indicate that virtual worlds generate user session lengths and frequencies of visits that are two to eight times greater than other virtual communities. We believe that as virtual world platforms become more widely available, the formation of virtual communities will be greatly accelerated. Through virtual worlds, community developers can offer richer and more engaging services to online users and more effective promotional vehicles to businesses and organizations.

Virtual worlds provide participants significantly expanded expressiveness, and the result is a more immersive interactive experience. In a virtual world, members create distinctive graphical representations of themselves, called Avatars. Avatars provide participants rich expressive abilities including happy, sad, angry faces as well as gestures such as waving, shrugging, jumping, bowing, etc. In some virtual worlds, Avatars can collect and exchange virtual objects that range from jewelry and other sartorial items to furniture and collectibles for their personal spaces. These objects offer a range of opportunities for advertising. Community sponsors can include facsimiles of their products within the virtual world environments; the product facsimiles become part of the users’ in world experiences and make much stronger impressions than advertisements about the product.

Objects in virtual world environments can also contain links to Web pages. For example, a furniture object such as a chair or table could link to a furniture manufacturer sponsoring the community. Virtual objects can be provided to Avatars who participate in a demonstration of a manufacturer’s product. The Web links to these objects can provide discount coupons that encourage purchases.. The possibilities for rich new means to reach customers with promotional vehicles will evolve with virtual worlds.

Virtual world technologies are still in a very early stage of evolution. The Palace, from Electric Communities, and WorldsAway from Fujitsu are the two most significant current sources of virtual world services and technologies (see screen shots, below). The Palace is the simplest form of an avatar virtual world, offering an integration of graphic images with text chat and a straightforward server installation. The richest interactive experiences today are available with WorldsAway that provides more extensive user controlled animations and interactive objects.

Virtual worlds could eventually attract a majority of virtual community participants. On America Online (AOL), 70 percent of all subscribers visit chat rooms at least once a month, and 15-20 percent of subscribers are heavy or regular users (two or more chat sessions per week). Fujitsu’s research indicates that about half of text chatters strongly prefer WorldsAway to text chat, and about one-fifth of people who do not like text chat do enjoy WorldsAway, indicating that penetration could extend well beyond the 20 percent of active text chatters and approach the 70 percent of occasional chatters.

Today there are significant hurdles for a user to overcome to use virtual worlds. Multiple megabytes of software must be downloaded and, as with any new application, individuals must learn how to use the software. As developers mitigate the hurdles, these environments will become increasingly popular and potentially could achieve penetrations equivalent to or greater than those of text chat. Until the downloads and user interface issues are mitigated however, we believe that only about 10 percent of total community participants will use virtual world services.

Despite low near-term numbers, there are still strong reasons for community developers to begin utilizing these environments today. First, virtual worlds generate usage rates that are multiples of any other virtual community building block. WorldsAway users averaged eight one-hour sessions per month when fees were around $2 per hour; when fees dropped to flat monthly rates ($5-$20), usage expanded to twelve three-hour sessions per month. With longer-than-average online sessions, virtual world users offer more advertising and sponsorship opportunities. Also, advertisers in virtual worlds can learn a great deal about developing effective interactive advertising techniques that will benefit them in the future.